Generally, the balance in the Notes Payable account will be reported on the balance sheet as follows:
- the amount due within one year of the balance sheet date will be a current liability, and
- the amount not due within one year of the balance sheet date will be a noncurrent liability.
The company should also disclose pertinent information for the amounts owed on the notes. This will include the interest rates, maturity dates, collateral pledged, limitations imposed by the creditor, etc.
Learn Accounting: Gain unlimited access to our seminar videos, flashcards, visual tutorials, exams, business forms, and more when you upgrade to PRO.